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Good morning Voornaam,

I often write about the retail space. I find it fascinating, particularly because investors tend to understand the operations of a retailer far better than any other industry. After all, you're far more likely to be a customer of Pick n Pay or The Foschini Group than Barloworld!

Where investors get it horribly wrong is in their assumptions about how resilient retailers are, particularly grocery chains. Margins are thin and the mix of products is crucial. With the explosion of on-demand ordering, it's also less important than ever before whether your local convenience store has a Pick n Pay, Checkers, Spar or Woolworths.

The scooter is what counts! More importantly, the product range and pricing are the differentiators, not the location.

After years of allowing Shoprite to pull ahead, Pick n Pay is now in crisis. Read Ghost Bites to find out why.

In and amongst all this great content, make sure you're balancing your portfolio by learning about ETFs as well as single stocks. I would like to bring your attention to the Ghost Stories podcast with Siyabulela Nomoyi of Satrix, in which we unpacked ETF performance in 2023.

Have a great Monday!

NEW: Magic Markets podcast

Banking has been an area of great interest this year. With that awful pun out the way, you can learn about the relative performance and strategic outlook of global giant JP Morgan and local stalwart Standard Bank. Join us in Episode 144 of Magic Markets, brought to you by B2IT.

Listen to Magic Markets Ep 144

NEW: Ghost Wrap podcast (Rex Trueform \| Barloworld \| Spar \| Capitec \| Vukile + Attacq)

Listen to Ghost Wrap

The Ghost Wrap podcast is a great way to stay on top of local company news. I went into more detail than usual on these stories, covering an acquisition by Rex Trueform, results from Barloworld and Spar, important trends at Capitec and the outlook at Vukile and Attacq. Ghost Wrap is brought to you by Mazars.

The lessons dished out by the markets this year have been all about how companies cope in inflationary conditions. The winners have one thing in common: pricing power.

Learn about pricing power in this piece I wrote for EasyEquities

Ghost Stories podcast

NEW: How have ETFs done thus far in 2023 and where was the right place to put your money? Find out in Ghost Stories with Siyabulela Nomoyi of Satrix.

Listen to Ghost Stories with Siya

For founders: the bizval podcast

NEW: Designing a business through critical thinking is a major ingredient for success. Hugh Stafford-Smith from the UK spoke to me about this topic on the bizval podcast.

Learn business design

Satrix INDI is an ETF with a Proudly South African flavour. Learn more here.

NEW: CA Sales Holdings is a really strong example of how locally listed companies can deliver great returns. The management team returned to Unlock the Stock to unpack the recent performance and answer questions about the strategy and business model. Don't miss it! Unlock the Stock is brought to you by A2X.

Watch Unlock the Stock

TreasuryONE Market Update

Manufacturing PMI data came in better than expected in the US, giving the dollar a shot in the arm and sending the rand way back up above R19. This risk-off sentiment in favour of the dollar also hit commodities, with Gold down below $1,820 this morning. Brent Crude has moved below $90 per barrel.

The US data provided a stark comparison to German manufacturing PMI, highlighting the weakness in Eurozone PMI. This afternoon's JOLTS job openings number could give more support to the dollar ahead of Friday's payroll number.

Locally, manufacturing PMI data and new vehicle sales for September were below expectations, reflecting the poor state of the local economy. The randed traded at roughly R19.30 to the dollar this morning.

For more information, you can watch the TreasuryONE weekly market review below or on the YouTube channel at this link.

NEW: Ghost Bites

The big earnings news was from Calgro M3 and Pick n Pay - and those results couldn't be more different! We also saw updates from Merafe, Nampak, Schroder Real Estate, Southern Palladium and Trustco.

Read Ghost Bites at this link to stay updated on local company news

Summers-time sadness: chaos at Pick n Pay

I don't often use memes. Sometimes though, they just say it best, so I made this one:

Wrong! They don't. And with the company in absolute disarray, there's now a sudden change of management as well. CEO Pieter Boone has taken the fall, which I'm not sure is fair actually. These problems existed well before his time.

Either way, Sean Summers of bull-market-Ferrari-driving fame is back in the hot seat. It's red hot, because he's returning to a very different world at Pick n Pay to the one he left behind.

Is this the turnaround that the company so desperately needs? Or is Shoprite now impossible to catch?

Either way, here's a chart to remind you that stock picking is incredibly fun:

For all the details on the Pick n Pay numbers (which are awful) and some great stuff from Calgro M3 to cheer you up, I'll see you in Ghost Bites!

You should expect us in your inbox Monday – Friday. If you don’t receive an email, please check your spam, or junk folder and “move us” into your primary inbox to ensure you get it each morning.

Disclaimer

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